[Federal Register Volume 87, Number 1 (Monday, January 3, 2022)]
[Notices]
[Pages 128-129]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-28423]


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SECURITIES AND EXCHANGE COMMISSION

[OMB Control No. 3235-0447, SEC File No. 270-392]


Submission for OMB Review; Comment Request; Extension: Rule 17f-6

Upon Written Request, Copies Available From: Securities and Exchange 
Commission, Office of FOIA Services, 100 F Street NE, Washington, DC 
20549-2736

    Notice is hereby given that, under the Paperwork Reduction Act of 
1995 (44 U.S.C. 3501-3520), the Securities and Exchange Commission (the 
``Commission'') has submitted to the Office of Management and Budget a 
request for extension of the previously approved collection of 
information discussed below.
    Rule 17f-6 (17 CFR 270.17f-6) under the Investment Company Act of 
1940 (15 U.S.C. 80a) permits registered investment companies 
(``funds'') to maintain assets (i.e., margin) with futures commission 
merchants (``FCMs'') in connection with commodity transactions effected 
on both domestic and foreign exchanges. Before the rule was adopted, 
funds generally were required to maintain such assets in special 
accounts with a custodian bank.
    The rule requires a written contract that contains certain 
provisions designed to ensure important safeguards and other benefits 
relating to the custody of fund assets by FCMs. To protect fund assets, 
the contract must require that FCMs comply with the segregation or 
secured amount requirements of the Commodity Exchange Act (``CEA'') and 
the rules under that statute. The contract also must contain a 
requirement that FCMs obtain an acknowledgment from any clearing 
organization that the fund's assets are held on behalf of the FCM's 
customers according to CEA provisions.
    Because rule 17f-6 does not impose any ongoing obligations on funds 
or FCMs, Commission staff estimates there are no costs related to 
existing contracts between funds and FCMs. This estimate does not 
include the time required by an FCM to comply with the rule's contract 
requirements because, to the extent that complying with the contract 
provisions could be considered ``collections of information,'' the 
burden hours for compliance are already included in other PRA 
submissions.\1\ Commission staff estimates that approximately 1,302 
series of 155 funds which report that futures commission merchants and 
commodity clearing organizations provide custodial services to the 
fund.\2\
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    \1\ The rule requires a contract with the FCM to contain two 
provisions requiring the FCM to comply with existing requirements 
under the CEA and rules adopted thereunder. Thus, to the extent 
these provisions could be considered collections of information, the 
hours required for compliance would be included in the collection of 
information burden hours submitted by the CFTC for its rules.
    \2\ This estimate is based on the number of funds that reported 
on Form N-CEN from July 31, 2020- July 31, 2021, in response to sub-
items C.12.6. and D.14.6. Money market funds are excluded from this 
estimate because they are not eligible securities.
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    Commission staff, however, estimates that any burden of the rule 
would be borne by funds and FCMs entering into new contracts pursuant 
to the rule as set forth in Table 1 below:

                     Table 1--Burden of Information Collection for Complying With Rule 17f-6
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                                     Estimated responses     Estimated hours burden      Estimated cost burdens
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New contracts with FCMs Annually..
                                    130 series...........  130 series x 0.1 hours =    13 hours x $425
                                                            13 hours.                   (attorney) \4\ = $5,525.
                                    15 funds \1\.........  15 funds x 1 hour = 15      15 hours x $425
                                                            hours.                      (attorney) \4\ = $6,375.
                                                           13 hours + 15 hours = 28    $5,525 + $6,375 =
                                                            hours \3\.                  $11,900.
    Totals........................  130 series and 15      28 hours annually.........  $11,900 annually.
                                     funds annually \2\.
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\1\ These estimates are based on the assumption that 10% of series and funds that currently effect commodities
  transactions enter into new FCM contracts each year. This assumption encompasses series and fund that enter
  into FCM contracts for the first time, as well as fund complexes and fund that change the FCM with whom they
  maintain margin accounts for commodities transactions.
\2\ Commission staff estimates that approximately 155 funds, representing 1,302 separate fund series, currently
  effect commodities transactions and could deposit margin with FCMs in connection with those transactions
  pursuant to rule 17f-6. Staff further estimates that of this number, 15 funds and 130 series enter into new
  contracts with FCMs each year.

[[Page 129]]

 
\3\ Based on conversations with fund representatives, Commission staff understands that funds typically enter
  into contracts with FCMs on behalf of series that engage in commodities transactions. Series covered by the
  contract are typically listed in an attachment, which may be amended to encompass new series. Commission staff
  estimates that the burden for a fund to enter into a contract with an FCM that contains the contract
  requirements of rule 17f-6 is one hour, and further estimates that the burden to add a series to an existing
  contract between a fund and an FCM is 6 minutes.
\4\ The $425 per hour figure for an attorney is from SIFMA's Management & Professional Earnings in the
  Securities Industry 2013, updated for 2021 modified by Commission staff to account for an 1,800-hour work-year
  and multiplied by 5.35 to account for bonuses, firm size, employee benefits and overhead.

    These estimates are made solely for the purposes of the Paperwork 
Reduction Act, and are not derived from a comprehensive or even a 
representative survey or study of the costs of Commission rules and 
forms.
    The collections of information requirements of the rule are 
necessary to obtain the benefit of relying on the rule. An agency may 
not conduct or sponsor, and a person is not required to respond to, a 
collection of information unless it displays a currently valid control 
number.
    The public may view the background documentation for this 
information collection at the following website, www.reginfo.gov. 
Comments should be directed to: (i) Desk Officer for the Securities and 
Exchange Commission, Office of Information and Regulatory Affairs, 
Office of Management and Budget, Room 10102, New Executive Office 
Building, Washington, DC 20503, or by sending an email to: 
[email protected]; and (ii) David Bottom, Director/Chief 
Information Officer, Securities and Exchange Commission, c/o John R. 
Pezzullo, 100 F Street NE, Washington, DC 20549 or send an email to: 
[email protected]. Written comments and recommendations for the 
proposed information collection should be sent within 30 days of 
publication of this notice to www.reginfo.gov/public/do/PRAMain. Find 
this particular information collection by selecting ``Currently under 
30-day Review--Open for Public Comments'' or by using the search 
function.

    Dated: December 28, 2021.
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2021-28423 Filed 12-30-21; 8:45 am]
BILLING CODE 8011-01-P